CBN to return N35m deposit to Bureaux de Change operators

The Central Bank of Nigeria on Friday said it would refund the N35m paid by licensed Bureau De Change operators across the country as mandatory caution deposit.

The move followed last week’s ban of direct sale of foreign exchange to BDCs operators by the CBN.

The apex bank confirmed this refund in a circular signed by the Director, Financial Policy and Regulation Department, Mr Kevin Amugo with reference FPRD/DIR/GEN/CIR/01/004 dated January 22.

It said while the N35m mandatory caution deposit would be refunded, the apex bank would still retain the N1m licensing fee.

The circular reads in part, “Given the recent development in the operations of BDCs in the economy, the CBN has decided as follows.

“The refund of mandatory caution deposit of N35m to all BDC operators and the retention of N1m licensing fee.

“Therefore, all eligible BDCs may wish to apply for refund of their caution deposits attaching evidence of payment and bank transfer details.”

The CBN Governor, Mr Godwin Emefiele had while announcing the ban of forex sale to BDC said that BDCs were free to source for foreign exchange from autonomous sources.

He said any BDC operator that is not satisfied with the apex bank decision should return the operational license to the CBN and ask for the refund of their N35m deposit.

Emefiele had said that Nigeria is the only country in the world where the CBN provides BDC operators with foreign exchange adding that with the continued depletion of the foreign reserves, such funding was no longer sustainable.

For instance, the governor said that between July 2014 and January this year, the country’ reserves had suffered great pressure from speculative attacks, round tripping and front loading activities by actors in the foreign exchange market.

This, he noted, had led to a decline in the reserves from $37.3bn in June 2014 to N28bn currently.

Emefiele lamented that owing to the speculative attack on the nation’s currency, the central bank’s monthly foreign earnings had fallen from as high as $3.2bn to as low as $1bn monthly.

He lamented that while the country’s reserves was declining, the average food import bill was witnessing a steady increase from N148.3bn per monthly in 2005 to an average of N917.6bn within the first nine months of 2015.

He said while the CBN would no longer provide the BDCs with foreign exchange for their operations, the apex bank would deploy more resources to monitoring their sources of foreign exchange to ensure that no operator is in violation of the bank’s anti-money laundering laws.

He said the decision was not a punitive measure, but rather it is meant to ensure that the CBN was better placed to carry out its mandate in an effective and efficient manner, which guarantees preservation of its scarce resources.